Macrodose Is the AI Bubble about to burst?
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Oct 15, 2025 The looming potential for an AI bubble burst is a hot topic, fueled by warnings from the Bank of England and IMF. The discussion highlights the resource limits of AI, along with alarming trends in speculative investments and debt. Additionally, tensions rise with the US-China trade war, unveiling the impact of tariffs and rare earth export controls. The podcast explores who might survive an AI downturn and questions the viability of recent economic gains linked to AI, while political implications for US farmers are also examined.
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Physical Limits Threaten AI Growth
- AI hype has outpaced material realities like energy, water and data‑centre limits, creating real physical constraints on growth.
- These constraints make the current high valuations and rapid AI investment levels fragile and potentially unsustainable.
Local Strain From Data‑Centre Boom
- Data‑centre growth has pushed local costs and resources: US hotspots saw bills rise 267% and London councils cite housing pressures.
- These concrete examples show how AI infrastructure demands affect everyday communities.
Speculative Finance Flags A Bubble
- Sky‑high stock price‑to‑earnings ratios and record junk‑bond issuance signal speculative excess in AI and tech financing.
- Markets are pricing companies well above current earnings, which is a classic bubble indicator.